EGMS December 18, 2015 Agenda Laporan Tahunan 2016 PT Bank Mandiri (Persero) Tbk versi B.Inggris

10 Consolidated Financial Statements 09 Cross Reference of Annual Report Award 2016 Criteria 08 Corporate Social Responsibility 07 Integrated Corporate Governance 06 Corporate Governance

2. EGMS December 18, 2015 Agenda

Resolutions Realization Date Remarks Perubahan Pengurus Perseroan 1. Approved the dismissal of Mr. Darmin Nasution as the Chief Commissioner as of his official appointment as the Coordinating Minister for Economic Affairs of the Republic of Indonesia on August 12, 2015 by extending deepest gratitude for his great contributions in his capacity as the Chief Commissioner. 2. Approved and appointed Mr. Wimboh Santoso as the Chief Commissioner. The appointment of the Chief Commissioner was effective following approval from the OJK based on the Fit and Proper Test and compliance with the applicable legislation. The tenure of the newly appointed Chief Commissioner would end on the closing of the fifth Annual GMS as of his appointment, with due observance of legislation regulating Capital Market and without prejudice to the rights of the Meeting to dismiss him at any time. 3. Therefore, following the approval from OJK of that appointment, the membership of BOC would be as follows: Board of Commissioners : President Commissioner: Mr. Wimboh Santoso Deputy Chief Commissioner: Mr. Imam Apriyanto Putro Independent Commissioner: Mr. Abdul Aziz Independent Commissioner: Ms. Aviliani Commissioner: Mr. Askolani Commissioner: Mr. Suwhono Independent Commissioner: Mr. Goei Siauw Hong Independent Commissioner: Mr. Bangun Sarwito Kusmuljono 4. To grant the power and authority to BOD with the right of substitution to take all the necessary acts relating to the resolutions of the Agendas in accordance with the applicable legislation, including stating the structure of BOC membership in a Notarial Deed and giving notification to the Ministry of Law and Human Rights of such membership, and requesting OJK to conduct a Fit and Proper Test for the Appointed Chief Commissioner in accordance with the applicable legislation. 2015 Implemented Determining the enforcement of Regulation of the Minister of State Owned Enterprises No. PER-09MBU072015 dated July 3, 2015 concerning Partnership and Environmental Development Program of State Owned Enterprises To approve the decision to enforce Regulation of the Minister of State Owned Enterprises No. PER-09MBU072015 dated July 3, 2015 concerning Partnership and Environmental Development Program of State Owned Enterprises as a guideline for conducting Partnership and Environmental Development Programs which will be implemented in 2016. 2015 Implemented 03 Company at a Glance 04 Management Discussion and Analysis on Companys Performance 05 Review of Business Support Function 01 Main Highlights 02 Management Report Board of Commissioners BOC is the main organ of the Company who has function in terms of supervision, providing advices and approval as well as other functions given based on the Articles of Association, provisions and regulations. Duties and Responsibilities of the BOC In performing its function, the BOC is responsible collectively and collegially, assisted by 4 four committees under the BOC, namely Audit Committee, Remuneration and Nomination Committee, Risk Monitoring Committee and Integrated Governance Committee. According to Article 19 of the Articles of Association, the BOC has the following duties and responsibilities: Duties of BOC: 1. To conduct supervision and responsible for supervision over the management policies, management in general, either upon the Company or the Company’s business and to provide advice to the Board of Directors for the interest of the Company and in accordance with the purposes and objectives of the Company. 2. To perform duties specifically mandated based on the Articles of Association, prevailing laws and regulations and or under the resolutions of the GMS; 3. To perform duties and responsibilities in accordance with the provisions set forth in the Articles of Association of the Company and resolutions of the GMS in good faith, with full responsibility and due care; 4. In performing their duties, the Board of Commissioners shall act for the interests of the Company and shall be responsible to the GMS; 5. To examine and review the annual report prepared by the Board of Directors and sign such annual report. Responsibilities of BOC encompass: 1. To supervise the implementation of the Business Plan and the Company’s budget; 2. To follow the development of the Company’s activities and in the event that the Company indicates a decline, the Board of Commissioners shall immediately report to the GMS as soon as possible and shall render advice on the improvements steps that shall be taken; 3. To propose to the GMS on the appointment of a Public Accountant that will audit the Company’s books; 4. To perform other supervisions determined by the GMS; 5. To render response to a periodical report of the Board of Directors and at any time required to give response to the Company’s development and report the results thereof to the Shareholders of Series A Dwiwarna share in a timely manner. 6. To respond and approve the Business Plan and annual budget as well as long-term Business Plan of the Company prepared and submitted to the Board of Directors; 7. To approve the Business Plan and annual budget of the Company at the latest on the thirtieth 30 th day of the first month after the commencement date of the new financial year; 8. In case of until the deadline as referred to in point 7 of this paragraph, the Board of Commissioners have not yet approved the Business Plan and annual budget of the Company, the Company’s Business Plan and annual budget of last financial year shall apply. The abovementioned duties and responsibilities are applied to all members of BOC, however the President Commissioner has special assignment, which are leading the internal meetings and performing invitation in writing to all members of BOC to attend the meeting Duties and Responsibilities of President Commissioner a. Serving a notice to the Meeting of the Board of Commissioners in written which is submitted to all members of the Board of Commissioners by mentioning the agenda, date, time, and the venue of Meeting. b. Acting as Chairman in the Board of Commissioners’ Meetings. c. Ensuring the arrangement of the Board of Commissioners’ Meeting and other Committees’ Meetings including the administration or Minutes of Meeting. d. Receiving reports from the Committees under the Board of Commissioners e. Coordinating all the duties of the Board of Commissioners which should, to the greatest possible extent, already been evenly distributed. Working Guidelines and Code of Conduct for BOC Board Charter In order to carry out the supervisory function as a part of duties and responsibilities in an efficient, effective, transparent, competent, independent, and accountable, the BOC in the Decree number KEP. KOM0022015 dated December 21, 2015, has established guidelines and rules of conduct which include: 1. General Provisions; 2. Function and Duties of the BOC; 3. Obligation of the BOC; 4. Rights and Authorities of the BOC; 5. Information, Bank Confidentiality and Conflict of Interests; 6. Committees and Other Supporting Institutions. 7. Meetings of the BOC and 8. the Division of Tasks. 9. Others The working guidelines were prepared under the following regulations: The Board of Commissioners 10 Consolidated Financial Statements 09 Cross Reference of Annual Report Award 2016 Criteria 08 Corporate Social Responsibility 07 Integrated Corporate Governance 06 Corporate Governance 1. Articles of Association. 2. Law No.402007 on Limited Liability Companies. 3. Law No.192003 on SOE. 4. OJK Regulation No. 33-POJK.04-2014 on the Board of Directors and Commissioner of Listed or Public Companies. 5. SOE Minister Regulation No.PER-09MBU2012 concerning Amendment to the Regulation of the Minister of State Owned Enterprise No. PER-01MBU2011 on the Implementation of Good Corporate Governance GCG in SOEs. 6. Indonesia’s Code of the National Committee on Governance NCG and Guidelines for GCG GCG Code Bank Mandiri. Rights and Authorities of the BOC Based KEP.KOM0052016 on the order of the Board Commissioner, the rights and authority of the Board of Commissioners is as following: 1. Provide decisions for the actions of the Board of Directors as set forth in the Articles of Association. 2. Any Commissioner shall, jointly or independently, be entitled to enter the premises or any other places used or controlled by the Bank and to examine the books, evidence documents, stock of goods, to examine and verify the cash condition for the purpose of verification and commercial papers as well as to be informed of any actions which have been taken by the Board of Directors. 3. Such actions as referred to in paragraph 2 shall be taken in the capacity as the Board of Commissioners and must be reported in the Meeting of the Board of Commissioners concerning such actions. 4. If deemed necessary, the Board of Commissioners shall be entitled to request for the assistance of experts in performing its duties for a limited period at the account of the Bank. 5. Any Commissioner shall be entitled to require an explanation concerning any matters from the Board of Directors as well as from all the lines under it and the Board of Directors shall be obligated to give an explanation. 6. Any Commissioner shall be entitled to attend the meetings held by the Board of Directors or its subordinate units without participating in making decisions. 7. The Board of Commissioners shall, by majority votes, be entitled at any time to suspend one or more members of the Board of Directors, if it is evident that they have acted against the Articles of Association or if they are proven to have neglected their obligations or in the event of any reason which is urgent to the Bank. 8. Such suspension shall be notified in writing to the persons concerned accompanied with the reason for such action. 9. Within 90 ninety days following the date of suspension, the Board of Commissioners shall be obligated to hold a GMS to decide whether the members of the Board of Directors concerned will be permanently dismissed or be returned to their position, where the persons concerned shall be given the opportunity to appear and defend themselves. Obligations of the BOC Based on KEP.KOM0052016 regarding Board of Commissioners rules, the BOC has obligations which can be described as follows: 1. Approve and supervise the implementation of RKAP. 2. Follow-up the results of supervision and recommendations provided in the event of any deviation from the applicable laws and regulations, articles of association and prudential banking practices. 3. Following the progress of Banks activities, and in the event that the Bank shows any sign of decline, immediately holding a GMS for reporting to the Shareholders accompanied with remedial actions to take. 4. Providing opinions and advice to the GMS on any issues deemed important for the Banks management. 5. Performing other supervisory duties as determined by the GMS and the laws and regulations. 6. Developing anti-fraud culture and concern throughout the Banks organization. 7. Giving directives in credit consultancy and reviewing the approval of credit exceeding a certain amount as agreed upon by the Board of Commissioners and the Board of Directors. Criteria for BOC Besides Articles of Association and Bank Indonesia regulation, the appointment criteria for BOC of Bank Mandiri also refers to other provisions, among others POJK No. 33POJK.042014 and Regulation of the Minister of State Owned Enterprises No. PER- 02MBU022015. The BOC members shall meet the following competency requirements: 1. Having adequate knowledge in the field of banking relevant to the position; 2. Having expertise and experience in banking andor finance; and 3. The ability for strategic management in order to develop a healthy bank. Other requirements that should be fulfilled by members of BOC are related to integrity as follows: 1. Having a good character, morals and integrity; 2. Capable to perform legal actions; 3. Never been sentenced due to a crime charged with 5 years or more imprisonment; andor 4. In the last 5 five years prior to the appointment and during hisher term of office: a. Never been declared bankrupt; b. Never become a member of board of directors andor BOC being declared guilty causing a company being bankrupt; c. Never been sentenced due to a crime causing losses to the state finance andor related to financial sectors; and. 03 Company at a Glance 04 Management Discussion and Analysis on Companys Performance 05 Review of Business Support Function 01 Main Highlights 02 Management Report 5. Never become a member of board of directors andor BOC who is during hisher term of office: a. Once refrained from convening an annual GMS; b. Hisher accountability as a member of Board of Directors andor Board of Commissioners was once not accepted by the GMS or heshe once did not provide accountability as a member of Board of Directors andor Board of Commissioners to the GMS; and c. Heshe once causing a company that had obtained license, approval, or registration from Financial Service Authority failed to be in compliance with the obligation for submission of annual reports andor financial statement to the Financial Service Authority. 6. Having commitment to comply with the laws and regulations; BOC Determination Procedure Determination of the Board of Commissioners must go through the process of fit and proper test by the Financial Services Authority through a petition filed by the Bank. Board of proposed amounted to a maximum of two 2 people for each vacancy, and the determination of candidates proposed has been conducted in accordance with the applicable legislation. The fit and proper test conducted by the Financial Services Authority, covering the administrative examination and interview. Approval or rejection of the application by the Financial Services Authority no later than 30 thirty days after receipt of the complete application. In the case of candidates who requested the approval of the Financial Services Authority has been approved and appointed as the Bank Management in accordance GMS, but is concerned not approved by the Financial Services Authority, the Bank through the AGM shall dismiss concerned. Candidate Management of Banks that have not been approved by the Financial Services Authority are prohibited from doing duty as a Member of the Board in the operations of the Bank and or other activities that have a significant influence on the policies and financial condition of the Bank, although it has been approved and appointed by the AGM. Composition of the Board of Commissioners prior to the Annual GMS Pursuant to Article 18 of the Articles of Association, the BOC shall comprise at least 3 three members, one of them may be appointed as the President Commissioner and if deemed necessary, another one of them may be appointed as the Deputy Chief Commissioner. Name Designation Legal Basis of Appointment Term of Office Fit and Proper Domicile Wimboh Santoso President Commissioner EGMS dated December 18, 2015 2016 - present OJK Indonesia Imam Apriyanto Putro Deputy Chief Commissioner AGMS dated March 16, 2015 2015 - present OJK Indonesia Aviliani Independent Commissioner EGMS dated May 21, 2014 2014 - present OJK Indonesia Goei Siauw Hong Independent Commissioner AGMS dated March 16, 2015 2015 - present OJK Indonesia Bangun S. Kusmulyono Independent Commissioner AGMS dated March 16, 2015 2015 - present OJK Indonesia Abdul Aziz Independent Commissioner AGMS dated April 2, 2013 2013 - present OJK Indonesia Askolani Commissioner EGMS dated May 21, 2014 2014 - present OJK Indonesia Suwhono Commissioner AGMS dated March 16, 2015 2015 - present OJK Indonesia Served until March 29, 2016. The period of his employment at the bank ended because it has got a new assignment as Director of PT Berdikari Persero. In 2016, there was change in composition of the Board of Commissioners, which was the appointment of Ardan Adiperdana as member of the Board of Commissioner and the termination period of Suwhono as member of the Board of Commissioner due to his appointment as President Director at one of SOE Companies. Therefore, the number of the Board of Commissioners as of December 31, 2016 were 8 person which consisted of one President Commissioner, one Deputy Chief Commissioner, four Independent Commissioners and two Commissioners with the following details: Name Designation Legal Basis of Appointment Term of Office Fit and Proper Test Organizer Domicile Wimboh Santoso President Commissioner EGMS dated December 18, 2016 2016 - present OJK Indonesia Imam Apriyanto Putro Deputy Chief Commissioner AGMS dated March 16, 2015 2015 - present OJK Indonesia 10 Consolidated Financial Statements 09 Cross Reference of Annual Report Award 2016 Criteria 08 Corporate Social Responsibility 07 Integrated Corporate Governance 06 Corporate Governance Aviliani Independent Commissioner EGMS dated May 21, 2014 2014 - present OJK Indonesia Goei Siauw Hong Independent Commissioner AGMS dated March 16, 2015 2015 - present OJK Indonesia Bangun S. Kusmulyono Independent Commissioner AGMS dated March 16, 2015 2015 - present OJK Indonesia Abdul Aziz Independent Commissioner AGMS dated April 2, 2013 2013 - present OJK Indonesia Askolani Commissioner EGMS dated May 21, 2014 2014 - present OJK Indonesia Ardan Adiperdana Commissioner AGMS dated March 21, 2016 2016 - present OJK Indonesia Fit and Proper Test The Board of Commissioners as the Banks management shall meet the requirements of integrity, competence and financial reputation as well as pass the fit and proper test organized by Financial Services Authority as stipulated in POJK No.27POJK.032016 on Fit and Proper Test for Primary Party of Financial Services Institutions Each member of the Board of Commissioners has participated in Fit and Proper Test conducted by Financial Services Authority and being considered passed the test. Table of Fit and Proper Test Name Designation Fit and Proper Test Organizer Date of Assignment Wimboh Santoso President Commissioner OJK February 16, 2016 Imam Apriyanto Putro Deputy Chief Commissioner OJK June 11, 2015 Aviliani Independent Commissioner OJK September 3, 2014 Goei Siauw Hong Independent Commissioner OJK June 25, 2015 Bangun S. Kusmulyono Independent Commissioner OJK June 25, 2015 Abdul Aziz Independent Commissioner OJK June 25, 2015 Askolani Commissioner OJK September 3, 2014 Suwhono Commissioner OJK June 25, 2015 Ardan Adiperdana Commissioner OJK September 27, 2016 Serving as Commissioner until March 29, 2016. His term of office at Bank Mandiri has ended due to his new assignment as President Director of PT Berdikari Persero Policy of Diversity in Composition of the Board of Commissioners Diversity is one of the elements that should be considered in determining the composition of the Board of Commissioners which are also tailored to the needs and complexity of business. Bank Mandiri strives to maintain the diversity of the composition of the Board of Commissioners, as reflected in the BOC Profile page 72-75. Aspects of diversity in the composition of the Board of Commissioners can be seen from some of the elements that are owned by the members of the Board of Commissioners including among them is the independence, expertiseeducation, work experience, age and gender. Diversity Aspects Education The diversity of educational backgrounds of the Bank Commissioners, indicated by a mix of education, namely: • Educational qualification from Bachelor, Master to Doctorate • Competence fields including the field of Economic Accounting, Development Studies, Strategic Management, Business Administration, Finance, Marketing, Environmental Management, Social Politics, AgronomyAgriculture, FisheriesSocial Economy. 03 Company at a Glance 04 Management Discussion and Analysis on Companys Performance 05 Review of Business Support Function 01 Main Highlights 02 Management Report Working Experience The diversity of work experience of the Board of Commissioners of Bank Mandiri, among others, namely: • Director of IMF 2013-2015 • 1 st Rank Officials of the Ministry of SOEs • 1 st Rank Officials of the Ministry of Finance • Member of Committee for the Acceleration and Expansion of Indonesias Economic Development 2012-2014 • 20 Chairman of National Committee for Micro Finance Empowerment • President Director at private company • Head of Finance and Development Supervisory Agency Age The diversity of ages of the Board of Commissioners is in the quite productive age range, i.e. 50-55 years old = 5 person and 56-60 years old = 2 person, and one person whose age is above 70 years old. Sex There is one woman member of the Board of Commissioners at Bank Mandiri. Composition of the Board of Commissioners has met the diversity elements which are a combination of independence, expertise education, work experience, age and gender. All members of the Board of Commissioners of Bank Mandiri has integrity, competence and good financial reputation. All members of the Board of Commissioners have obtained the approval of Financial Services Authority and have passed fit and proper test. In relation to the expertise of the Board of Commissioners of Bank Mandiri has been explained in Profile of the Board of Commissioners in this Annual Report. Job Descriptions of the Supervisory Board of Commissioners The BOC has established committee pursuant to Decree of the Board of Commissioners of PT Bank Mandiri Persero Tbk No. KEP.KOM0042016 on the Change in the Membership of Audit Committee, Risk Monitoring Committee, Integrated Governance Committee and Remuneration and Nomination Committee of PT Bank Mandiri Persero Tbk as supporting organ of the BOC in conducting supervisory function. The division of tasks and responsibilities of the Board of Commissioners is set based on the role of each member of the Board of Commissioners as Chairman and Vice Chairman of the committee under the coordination of the Board of Commissioners, in accordance with the competence and experience as can be seen in the following table: Committees Member of Committee Board of Commissioners Audit 1. Aviliani as Chairman and Member 2. Askolani as Member 3. Goei Siauw Hong as Member 4. Ardan Adiperdana as Member Remuneration and Nomination 1. Bangun S. Kusmulyono as Chairman and Member 2. Wimboh Santoso as Member 3. Imam Apriyanto Putro as Member 4. Abdul Azis as Member 5. Askolani as Member 6. Aviliani as Member 7. Goei Siauw Hong as Member 8. Ardan Adiperdana as Member Risk Monitoring 1. Abdul Azis as Chairman and Member 2. Wimboh Santoso as Member 3. Goei Siauw Hong as Member 4. Bangun S. Kusmulyono as Member Integrated Governance 1. Membership of Bank Mandiri: a. Abdul Azis as Chairman b. Goei Siauw Hong sebagai Anggota c. Imam Apriyanto Putro as Member d. Aviliani as Member e. Bangun S. Kusmulyono as Member 2. Membership of Subsidiaries 10 Consolidated Financial Statements 09 Cross Reference of Annual Report Award 2016 Criteria 08 Corporate Social Responsibility 07 Integrated Corporate Governance 06 Corporate Governance Management Risk Certification In 2016, Board of Commissioners has passed the certification of risk management as followed: Name Certificate Issuer No. Competence Certificate No. Reg Level FieldArea Date Issuer Validity Period Expiry Date Wimboh Santoso National Professional Certification Agency LSPP 64120 1210 6 0000043 2016 KEU. 030 1875016 Level 1 Risk Management 15-Jan-16 4 years 15-Jan-20 Imam Apriyanto Putro Risk Management Certification Institution BSMR 00680024 1504110020068900 Level 1 Risk Management 11-Apr-15 Abdul Aziz Bara Risk Forum BR.149 CTF112016 Refreshment: Revisit Entriprise Risk Management and Learning Best Practices of Credit Risk Management di Bandung 30-Nov-16 LSPP 64120 1239 5 0003548 2015 KEU. 030 9392115 Level 2 Banking Risk Management 11-Apr-15 4 years 11-Apr-19 Askolani LSPP 64120 1239 4 0006885 2014 KEU. 030 9000827 Level 1 Banking Risk Management 24-Jun-14 24-Jun-18 Aviliani BARa Risk Forum BR.246 CTF092014 Risk Management Certification Refreshment Program -Moscow 15-Sep-14 BARa Risk Forum Refreshment Stockholm 19 - 21 Sept 2016 21-Sep-16 21-Sep-18 Suwhono Non-aktif LSPP 64120 1239 4 0003833 2015 KEU.030 9392315 Level 1 Banking Risk Management 17-Apr-15 4 years 17-Apr-19 Goei Siauw Hong LSPP 64120 1239 5 0003834 2015 KEU.030 9392215 Level 2 Banking Risk Management 17-Apr-15 4 years 17-Apr-19 Bangun S. Kusmulyono LSPP Refreshment: Managing Risk to make a Healthy Credit Portfolio 16-Nov-16 BSMR 0508100050000899 Risk Management Certification Refresher Course 14-15 May 2014 BSMR Risk management in Retail Banking 22-25 Feb 2010 BSMR Refreshment Program: Risk Management Certification 23 May 2008 Bank Indonesia Risk Management Training for Bank Commissioner 10-Aug-05 Ardan Adiperdana LSPP Level 1 KOM Refreshment Manajemen Resiko Perbankan 15-Dec-16 03 Company at a Glance 04 Management Discussion and Analysis on Companys Performance 05 Review of Business Support Function 01 Main Highlights 02 Management Report Independent Commissioner In order to support the implementation of GCG as well as to create work environment to be more objective and based on fairness principles among the stakeholders shareholders, regulators, business partner, customers and others, having an adequate number of Independent Commissioners is a must for Bank Mandiri. Based on the AGMS Resolutions held on March 21, 2016, four person out of eight members of the Board of Commissioners have been appointed as Independent Commissioners, namely Ms. Aviliani, Mr. Goei Siauw Hong, Mr. Abdul Aziz and Mr. Bangun Sarwito Kusmuljono. Therefore, the composition of Bank Mandiri’s Independent Commissioners has reached more than 50 as the regulation of FSA. Criteria for Independent Commissioner The criteria for Independent Commissioner within the BOC as required by OJK are as follows. 1. A Member of the BOC with no financial, managerial, share ownership, family relationship with other fellow members of BOC, Board of Directors andor controlling shareholders and have the relation with the bank, which can affect their judgment to act independently. 2. Have not been people who have worked or have had any authority and responsibility for planning, directing, controlling, or supervising the activities of the Issuer or Public Company within 6 six months, except for reappointment as an Independent Commissioner of Public Company for the next period. 3. Shall not have shares either directly or indirectly in the Issuer or the Public Company. 4. Shall not have any affiliation relationship with the Issuer or Public Company, a member of the BOC, a member of the Board of Directors or the primary shareholders of the Issuer or a Public Company. 5. Shall meet the requirements as stipulated in applicable regulations. 6. Shall not have any business relationship, directly or not directly related to the business activities of the Issuer or a Public Company. Statement of Independent Commissioner Each Independent Commissioner of Bank Mandiri made a statement of their independence and submitted it to OJK with the following contents:: Statement of Independence I signed below Name: PlaceDate of Birth: Domicile Address Copy of IDDriving License attached: Home Telephone: Designation: Name of Company: Company Telephone: Herewith I declare that I: 1. Do not have financial, managerial, stock ownership, family relation with other members of the BOC, Board of Directors andor controlling shareholders or have any relationship with the bank, which would affect my judgment to act independently in the implementation of GCG for the Commercial Bank. 2. If in the future, I am found having any of the above relationships as stated in point 1, therefore I’m willing to surrender my position as Independent Commissioner and willing to be replaced. Thereby the statement of independence which I made truthfully. Independence of the BOC The affiliate relationship between the Board of Directors, BOC and Controlling Shareholders to measure the independence of the BOC which covers: 1. Affiliate relationships between fellow members of the Board of Directors; 2. Affiliate relationships between members of the Board of Directors and the BOC; 3. Affiliate relationships between the Board of Directors with the ultimate andor controlling Shareholders; 4. Affiliate relationships between fellow members of the BOC; and 5. Affiliate relationship between members of the Board of Commissioners with the ultimate and or controlling shareholder 10 Consolidated Financial Statements 09 Cross Reference of Annual Report Award 2016 Criteria 08 Corporate Social Responsibility 07 Integrated Corporate Governance 06 Corporate Governance Table of Affiliate Relationship of the BOC Name Financial and Family Relationship of BOC Financial Relationship With Family Relationship With BOC BOD Controlling Shareholders BOC BOD Controlling Shareholders Yes No Yes No Yes No Yes No Yes No Yes No Wimboh Santoso √ √ √ √ √ √ Imam Apriyanto Putro √ √ √ √ √ √ Aviliani √ √ √ √ √ √ Goe Siauw Hong √ √ √ √ √ √ Bangun S. Kusmulyono √ √ √ √ √ √ Abdul Aziz √ √ √ √ √ √ Askolani √ √ √ √ √ √ Suwhono √ √ √ √ √ √ Ardan Adiperdana √ √ √ √ √ √ Served until March 29, 2016. The period of his employment at the bank ended because it has got a new assignment as Director of PT Berdikari Persero. Stock Ownership of the Board of Commissioners Until December 31, 2016, the stock ownership of the Board of Commissioners of Bank Mandiri did not reach 5 five percent of the paid up capital of Bank Mandiri, other banks, non-bank financial institutions and other companies domiciled inside or outside the country as provided on the following table: Board of Commissioners Designation Stock Ownership of 5 or Above of Paid Up Capital Bank Mandiri By Family at Bank Mandiri Other Companies Other Bank Non-Bank Financial Institution Wimboh Santoso President Commissioner Independent Commissioner Nil Nil Nil Nil Nil Imam Apriyanto Putro Deputy Chief Commissioner Nil Nil Nil Nil Nil Aviliani Independent Commissioner Nil Nil Nil Nil Nil Goei Siauw Hong Independent Commissioner Nil Nil Nil Nil Nil Bangun S. Kusmulyono Independent Commissioner Nil Nil Nil Nil Nil Abdul Aziz Independent Commissioner Nil Nil Nil Nil Nil Askolani Commissioner Nil Nil Nil Nil Nil Suwhono Commissioner Nil Nil Nil Nil Nil Ardan Adiperdana Commissioner Nil Nil Nil Nil Nil Served until March 29, 2016. The period of his employment at the bank ended because it has got a new assignment as Director of PT Berdikari Persero.. Concurrent Position and Conflict of Interest The members of Bank Mandiri BOC do not serve in a concurrent position beyond which are admitted by the regulations and may cause a conflict of interest prohibited by legislation. The BOC may serve in a concurrent position as a member of a BOC, Board of Directors or as an Executive Officer at 1 one institution company that is not a financial institution; or in order to carry out oversight functions on one 1 non-bank subsidiaries controlled by Bank Mandiri. If a non-independent member of the Board of Commissioners runs functional tasks of the shareholders which are legal entities in the group effort, andor members of the Board of Commissioners hold positions at organizations or nonprofits, all concerned not neglect the duties and responsibilities as a member of the Board of Commissioners of Bank Mandiri, therefore it does not count as double post. 03 Company at a Glance 04 Management Discussion and Analysis on Companys Performance 05 Review of Business Support Function 01 Main Highlights 02 Management Report Table of Concurrent Position of the BOC Name Designation Designation at Other Companies Institutions Name of Other Companies Institutions Wimboh Santoso President Commissioner Director Indonesian Banking Development Institute Imam Apriyanto Putro Deputy Chief Commissioner Secretary to Ministry Ministry of Soe Aviliani Independent Commissioner Independent Commissioner PT Dyandra Media Internasional, Tbk. Goei Siauw Hong Independent Commissioner President Director PT Gagas Prima Solusi Bangun S. Kusmulyono Independent Commissioner - - Abdul Aziz Independent Commissioner - - Askolani Commissioner Director General of Budget Ministry of Finance Suwhono Commissioner - - Ardan Adiperdana Commissioner Chairman Finance and Development Supervisory Agency Serving as Commissioner until March 29, 2016. His term of office at Bank Mandiri is ended due to his new assignment as President Director of PT Berdikari Persero Commissioner is prevented from doing so, the meeting shall be notified by the Deputy Chief Commissioner. In the event that the Deputy Chief Commissioner is prevented from doing so, the notice to the meeting shall be served by one of the members of the Board of Commissioners. The notice to the meeting of Board of Commissioners shall be served in writing containing the agenda, date, time, and the venue of Meeting, then delivered to each member of the Board of Commissioners against a sufficient receipt, or by the prepaid registered mail or courier service, email or any other means at the latest 5 five days prior to the meeting so that the BOC had the opportunity to examine information and or request information additional prior to the meeting. However, if the meeting has been scheduled by the decision of the previous meeting, then do not call another meeting. Meeting of the Board of Commissioners is chaired by the President Commissioner, if unable to do by the Deputy Chief Commissioner, and if unable to do by a member of the Board of Commissioners. Meeting is valid and may adopt binding resolutions if attended or represented by more than 23 two third the number of members of the Board of Commissioners. All decisions taken in a meeting with deliberation and consensus, if not achieved, the meeting decisions taken by majority vote. All decisions of the meeting are binding to all members of the Board of Commissioners. There will be minutes of meeting made on each Board of Commissioners meeting which is signed by the Chairman of the Meeting and the Board of Commissioners in attendance. In addition to the meetings as described above, the meeting of the Board of Commissioners also can be held through media teleconference, video conference or other electronic media that enables all meeting participants can see each other andor hear directly as well as participating in the meeting. Besides the Board of Directors and Secretary to the Board of Commissioners, the meeting is also attended by members of the Committees under the Board of Commissioners upon invitation of the President Commissioner. The President Commissioner may invite other guests as listed in Article 8 of the Board Charter. Management of the BOC’s Conflict of Interest The Board of Commissioners are prohibited from taking actions that could harm the Company and must disclose conflicts of interest referred to Board of Commissioners charter, the transparency of information and conflicts of interest are set as follows: 1. Each Commissioner shall keep the information shall be kept confidential by legislation including provisions on Insider Trading and other information that the Company has not been disclosed to the public. 2. Each Commissioner shall : a. Their shareholding in the Company as well as in other companies domiciled inside or outside the country b. Financial relations and family relations with other members of the Board of Commissioners and Board of Directors members and their families c. Other information which according to legislation must be disclosed to the public 3. Board of Commissioners are prohibited to involved in decision making related to banking operations andor decision-making that may pose a conflict of interest. 4. The Board of Commissioners in performing their duties, responsibilities and authority are forbidden to take advantage of the Company for personal, family, company or certain parties in a manner contrary to the laws and the Companys code of conduct. Meeting of the BOC The Board of Commissioners shall convene a meeting at least 1 one time in two 2 months or at any time when deemed necessary by one or more members of the Board of Commissioners on written request of the Board of Directors according to the provisions stipulated in the Articles of Association. In addition, the Board of Commissioners is required to convene meetings with the Board of Directors periodically at least 1 one time in 4 four months. A notice for the meeting of Board of Commissioners shall be served by the President Commissioner, and in case of the President 10 Consolidated Financial Statements 09 Cross Reference of Annual Report Award 2016 Criteria 08 Corporate Social Responsibility 07 Integrated Corporate Governance 06 Corporate Governance Frequency, Level of Attendance and Agenda of Board of Commisioners Meeting Throughout 2016, the Board of Commissioners held 35 internal meetings with level of attendance as provided on the following table: Meeting Da te Meeting A genda W imboh S an toso Imam A priy an to P utr o A viliani G oei Siauw Hong Bangun S. K usmuly ono A bdul Aziz Ask olani Suwhono A rdan A diper dana 20 Jan 1. Discussion on Work Visit of the Commissioners in 2016 2. Miscellaneous √ √ √ √ √ √ √ 3 Feb 1. Proposed AGMS date and agenda 2. Approval for 2015 Financial Statements 3. Policy of the Establishment of Evaluation and Corporate Action for Subsidiaries. 4. Update on BC Card 5. Miscellaneous √ √ √ √ √ √ √ 10 Feb 1. Approval of Treasury Line Facility Cross Currency SWAP andor Interest Rate SWAP to PT Surya Artha Nusantara Finance SAN Finance-Astra Group 2. Approval of New Credit Facility, Extension of Credit Facility Period and Requirement Changes to Related Party under name:: - PT Ananta Auto Andalan - PT Mercindo Autorama - PT Tunas Mobilindo Perkasa Tunas 3. Miscellaneous √ √ √ √ √ √ √ 17 Feb 1. To affirm the effective date of the appointment of Mr. Wimboh Santoso as President Commissioner with regard to Letter of OJK No.SR-33D.032016 dated February 11, 2016 2. Determination of members of the Board of Commissioners appointed as Chairman of 2015 GMS √ √ √ √ √ √ √ √ 24 Feb 1. Request for the Approval of the Period Extension of Joint Financing Facility between Bank Mandiri and PT Mandiri Tunas Finance 2. Miscellaneous √ √ √ √ √ √ √ √ 2 Mar Discussion on Criteria of PT Bank Mandiri Persero Tbk Management Candidates. √ √ √ √ √ √ √ √ 4 Mar Recommendation on the BOD Candidates of PT Bank Mandiri Persero Tbk √ √ √ √ √ √ √ √ 23 Mar 1. Approval to Increase Plafond and New Comm Line Facility for PT Asuransi Jasa Indonesia 2. Approval of Short Term Credit Facility and Treasury Line Facility for PT Astra Sedaya Finance 3. Approval of Cash Loan and Non Cash Loan Facility for PT United Tractor Semen Gresik Semen Indonesia Group 4. Approval of Investment Credit Facility and Changes in the Terms of Existing Credit Facility for PT Marga Mandalasakti Astra Group √ √ √ √ √ √ √ √ 30 Mar 1. Approval of Organizational Structure 2. Approval of Capital Injection of PT Mandiri AXA General Insurance PT MAGI 3. Persetujuan penambahan modal PT Mandiri Utama Finance PT MUF √ √ √ √ √ √ √ √ 6 Apr 1. Update on Business Development of Corporate Banking Debtors: Krakatau Steel, Medco, Trikomsel 2. Update on Development of Commercial Debtors: • Exposure of Commercial Debtors from Economy Sector • Top 20 NPL of Commercial Debtors and Efforts that have been done. • Business Issue of Commercial Debtors 3. Pembidangan Komite-komite dibawah Dewan Komisaris √ √ √ √ √ √ √ √ 4 May 1. Job Descriptions of Committees under the Board of Commissioners 2. Change of the Board of Commissioners’ Code of Conduct 3. Approval of New Credit Facility and Period Extension of Credit Facility to Related Party under name PT Mulia Sasmita Bhakti 4. Board of Commissioners’ Work Visit to Regional Papua √ √ √ √ √ √ √ 11 May 1. Notable Issues of Bank Mandiri 2. Consolidated Financial Statements √ √ √ √ √ √ √ 18 May Approval of PT Astra International Tbk, PT Federal International Finance and PT Surya Artha Nusantara Finance Astra Group √ √ √ √ √ √ √ 8 Jun 1. Approval of Period Extension of Facility and KMK Facility Limit Increase for PT Pos Indonesia 2. Discussion on Determination Process of Bank Mandiri’s Committee Members from Independent Party √ √ √ √ √ √ √ 15 Jun 1. Performance as of May 2016 Bank only. 2. Discussion on Strategic Issue related to Information Technology of Bank Mandiri 3. Approval of Revision of RBB 2016-2018 and 2016 RKAP √ √ √ √ √ √ √ 03 Company at a Glance 04 Management Discussion and Analysis on Companys Performance 05 Review of Business Support Function 01 Main Highlights 02 Management Report Meeting Da te Meeting A genda W imboh S an toso Imam A priy an to P utr o A viliani G oei Siauw Hong Bangun S. K usmuly ono A bdul Aziz Ask olani Suwhono A rdan A diper dana 20 Jun Approval of Revision of RBB 2016-2018 and 2016 RKAP √ √ √ √ √ √ √ 22 Jun 1. Approval of Pension Benefit Increase and Other Benefits for Pension Fund Bank Mandiri 1 until 4 Participants in 2016 2. Approval of Credit Facility for Kimia Farma Group 3. Miscellaneous √ √ √ √ √ √ √ 29 Jun 1. Approval of Credit Line Facility Extension under name Bank Mandiri Europe Limited 2. Approval of the Change in Provisions and Credit Covenant under name Mandiri Utama Finance √ √ √ √ √ √ √ 20 Jul 1. Approval of Capital Injection for PT Bank Syariah Mandiri Persero Tbk. 2. Approval of Land Capping of PT Bank Mandiri Persero Tbk for MRT area √ √ √ √ √ √ √ 27 Jul Update on Problematic Debtors Handling √ √ √ √ √ √ √ 3 Aug Presentation of the Performance of PT Mandiri Sekuritas as of June 2016 √ √ √ √ √ √ √ 9 Aug Interview with the Candidate of Audit Committee’s Member √ √ √ √ √ √ √ √ 15 Aug Follow Up on the Result of BPKP Review on Joint Venture Process with BC Card √ √ √ √ √ √ √ √ 24 Aug 1. The Commissioners’ Approval for: • Extension, additional and provision of Credit Facility for Astra Group • Commercial Line New Facility Counter Guarantee of LC Import SKBDN for PT Asuransi Jasa Indonesia Persero Jasindo 2. Monitoring reports of Business plans Bank RBB Semester 12016 √ √ √ √ √ √ √ √ 7 Sep Approval of Organizational Structure √ √ √ √ √ √ √ √ 14 Sep 1. Approval of Period Extension of Intraday Facility under name PT Mandiri Sekuritas 2. Approval on Extension of Credit Line Facility of PT Bank Syariah Mandiri 3. Proposed QAB in Malaysia and Development Plan for Bank Mandiri’s Network in ASEAN √ √ √ √ √ √ √ √ 28 Sep Proposed the Additional Budget for 2016 Credit Account Write Off √ √ √ √ √ √ √ √ 12 Oct Approval of Capital Injection Plan for PT Bank Mandiri Taspen Pos Bank Mantap √ √ √ √ √ √ √ √ 19 Oct 1. Approval of Proposal of Facility Extension for PT Federal International Finance and New Facility to several companies within Astra Group 2. Approval of KPBM Revision √ √ √ √ √ √ √ √ 26 Oct 1. Approval of Fund Provision to Related Party on Consumer Credit Facility and Credit Card 2. Approval of Period Extension of Facility and Facility Limit Increase to Related Party under name PT Ananta Auto Andalan 3. Approval of Investment Credit Facility, Extension of Facility Validity Period, and Changes in Terms and Condition under name Kimia Farma √ √ √ √ √ √ √ √ 2 Nov Approval on the Extension and Enhancement of Credit Line Facility under the name of PT Bank Mandiri Taspen Pos √ √ √ √ √ √ √ √ 23 Nov 1. Approval of Proposal for Additional Budget –Write Off 2. Approval of Proposal for 2017 RKAP and RBB 2017-2019 3. Approval of Proposal for 2016-2020 Bank Mandiri Corporate Plan 4. Approval of Credit Facility Extension to Related Party under name PT Tunas Ridean and PT Mandiri Utama Finance 5. Approval of Limit Increase and Availability Period Extension for Astra Group 6. Approval of Fund Provision to Related Party on Consumer Credit Facility and Credit Card. √ √ √ √ √ √ √ √ 30 Nov Approval on Provision of Investment Credit Facility to PT Trans Bumi Serbaraja TBS - Astra Group √ √ √ √ √ √ √ √ 14 Dec 1. Update Collection tahun 2016 dan Strategi tahun 2017 2. Update on 2016 Collection and 2017 Strategy 3. Update on Operational Progress of BMEL and Overseas Offices 4. Update on Bank Mandiri Assets √ √ √ √ √ √ √ √ 21 Dec 1. Approval of Validity Period Extension and Limit Increase of PKS and MTF 2. Improvement of 2016 Board Charter √ √ √ √ √ √ √ √ Number of Meetings 32 35 35 35 35 35 35 10 8 Number of Attendance 32 35 35 35 35 35 35 10 8 Percentage of Attendance 100 100 100 100 100 100 100 100 100 Serving as Commissioner until March 29, 2016. His term of office at Bank Mandiri is ended due to his new assignment as President Director of PT Berdikari Persero According to Fit and Proper Test result, Mr. Ardan Adiperdana served as a member of the BOC effective as of September 27, 2016. Mr. Wimboh Santoso effectively served as President Commissioner with regard to fit proper test as of February 16, 2016. 10 Consolidated Financial Statements 09 Cross Reference of Annual Report Award 2016 Criteria 08 Corporate Social Responsibility 07 Integrated Corporate Governance 06 Corporate Governance Decrees of the Board of Commissioners in 2016 Throughout 2016, the Board of Commissioners has released the following policies: Number Date Subject KOM0362016 April 4, 2016 Change of Organizational Structure of PT Bank Mandiri Persero Tbk KOM0702016 June 21, 2016 Revised 2016 RKAP and 2016-2018 Annual RBB of PT Bank Mandiri Persero Tbk KOM0842016 July 20, 2016 Planning of Additional Capital of PT Bank Syariah Mandiri in 2016 KOM1232016 September 29, 2016 Proposal on Additional Budget for 2016 Credit Write Off KOM1312016 October 19, 2016 Material of Credit Policy of Bank Mandiri Induction Program for the New Commissioner In order to provide an overview of business activities, the Company’s future plans, guides and other work that is the responsibility of the Board of Commissioners, Bank Mandiri conducts an induction program for new members of the Board of Commissioners which is prepared by the Corporate Secretary of the Group in the form of soft copy and hard copy documents. Such documents among others Annual Report, the Work Plan and Budget CBP, Long-Term Plan of the Company RJPP, Articles of Association, Corporate Governance Policy , Code of Ethics, Work Program Committee of the Board of Commissioners and the Board of Commissioners, the Code of Conduct of the Board of Commissioners, Board of Directors Code of Conduct and the Code of Conduct of Committees under the Board of Commissioners, as well as laws and regulations related to the business process of Bank Mandiri. Induction program is also conducted through on site visits to units in the Head Office, as well as in the region to meet and face to face with the ranks of Bank Mandiri in the Central and Regional Offices. Regarding the change in composition of the Board of Commissioners of Bank Mandiri based on the AGMS Resolution dated March 21, 2016, Bank Mandiri conducted program of induction and enhancement of capabilities for the new Commissioner by distributing Codes Board Board Manual as a reference in carrying out the functions of supervisory duties. Mr. Ardan Adiperdana as the new member of the Board of Commissioners who was appointed at AGMS has participated in the following induction program: Type of Program Date of Implementation Refreshment Public Training – Optimizing Market Risk Management 15 December 2016 Program of TrainingCompetence Development for the BOC In carrying out duties and responsibilities, the BOC shall possess strong commitment to enhance hisher knowledge and competence, particularly related to the banking industry development. The program of trainingcompetency development for the Board of Commissioners can be viewed on page 108-109. 03 Company at a Glance 04 Management Discussion and Analysis on Companys Performance 05 Review of Business Support Function 01 Main Highlights 02 Management Report Assessment of the Board of Commissioners’ Performance Once a year, the assessment of performance of the Board of Commissioners is conducted by using the method of self assessment. The success of the performance of the Board of Commissioners is measured by observing risk profile aspects, Good Corporate Governance GCG, earnings and bank capital which are reflected the Healthy Level of Bank. The Board of Commissioners performance measurement of success is an integral part in the scheme of compensationincentives for the Board of Commissioners which can be viewed in the realization of the Annual Work Plan Budget CBP as the result of the collegial work of the entire Board of Commissioners. The Shareholders render the results of the performance evaluation of the Board of Commissioners as a whole and the performance of each of the Board of Commissioners individually as basic considerations for Shareholders to discharge andor reappointed Board of Commissioners concerned. Assessment Procedures for the Board of Commissioners’ Performance The performance of the Board of Commissioners is reported to the shareholders at GMS and assessed based on criteria which are relevant to the implementation of duties and responsibilities of the Board of Commissioners covering several aspects: structural and operational, briefing and supervision as well as reporting. Indicators of Performance Evaluation of the BOC The indicators that used in evaluating the performance of the BOC are as follows: 1. Implementation of duties and supervisory function of the Commissioner according to the Articles of Association; 2. Compliance with regulations; 3. Healthy level of Bank; 4. Level of attendance at the meeting of the Board of Commissioners as well as meetings with existing committees; 5. Involvement of the BOC in specific assignments. Parties to Conduct Assessment Aside from the Self Assessment method, the assessment of the performance of the Board of Commissioners can be conducted by GMS and Bank Indonesia. The assessment by Bank Indonesia is conducted with reference to the Circular of Bank Indonesia No.1515DPNP on Implementation of Corporate Governance for Commercial Banks whereas the assessment is based on the report of GCG self assessment to Bank Indonesia on regular basis. The indicators used for assessment are related to the implementation of duties and responsibilities of the Board of Commissioners including the TARIF principles in running the supervisory function to the management of Bank Mandiri. While the assessment by GMS is conducted when the Board of Commissioners submits the supervisory report that has been done during the fiscal year as mentioned in the Annual Report. Furthermore, the GMS will grant full release and discharge acquit et decharge to the Board of Commissioners for the relevant financial year of operations. Mechanism of Resignation and Dismissal of the BOC As stipulated in Article 15 of the Articles of Association of Bank Mandiri, the mechanism of resignation of the BOC is as follows: a. A member of the BOC may voluntary resign from his her office prior to expiry of hisher term of office and the relevant member of the BOC shall submit the written notice regarding such intention to the Company. The Company shall convene a GMS to resolve the application for resignation of the said member of the BOC not later than 90 ninety days as of the date of the said application for such resignation received. If the GMS is convened less than 90 ninety days and resolves to accept such resignation of the said member of the BOC, the GMS may resolve to accept such resignation effective earlier than 90 ninety days after such application for resignation. b. The resigned member of the BOC shall be discharged from any duties after the GMS properly accepts such resignation and obtain release and discharge from the Annual GMS. While the mechanism of dismissal of the BOC is as follows: a. The BOC can be dismissed by virtue of a resolution of the GMS by stating the reasons thereof, i.e.: 3. failed to comply with the laws and regulations andor provisions of the Articles of Association. 4. involved in any action harming the Company andor the State; 5. being declared guilty under the final and enforceable court verdict; or 6. voluntary resignation ; 7. other reasons deemed properly by the GMS for the purposes and interests of the Company. b. The relevant member of the BOC is being rendered an opportunity to defend himher self in the relevant GMS in respect of the dismissal. Loan Policy for the Board of Commissioners The internal regulation of Bank Mandiri discloses that the Board of Commissioners is treated equally with regular customers and there is no special interest loan for the Board of Commissioners. In 2016, none of the members of the Board of Commissioners received the loan from Bank Mandiri. If there is loan for the Board of Commissioners, therefore it will be counted based on legal lending limit of Bank Mandiri pursuant to Regulation of Bank Indonesia No. 813PBI2006 dated 5 October 2006. 10 Consolidated Financial Statements 09 Cross Reference of Annual Report Award 2016 Criteria 08 Corporate Social Responsibility 07 Integrated Corporate Governance 06 Corporate Governance Board of Directors is one of the Company’s main organs that plays an important role which is responsible collegially on the Company’s management for the interest and purpose of the Company. As stipulated in the Articles of Association of the Company, the Board of Directors is entitled to represent the Company, both inside and outside the court. As a manifestation of the accountability of the Company’s management, the Board of Directors is responsible to GMS according to the GCG principles. Duties and Responsibilities of the Board of Directors The main duties of the Board of Directors according to the Articles of Association are: a. To operate and responsible for the management of the Company for the interests of and in accordance with the purposes and objectives of the Company stipulated in the Articles of Association, and lead the management of the Company. b. To maintain and manage the Company’s assets. The Board of Directors shall be fully responsible for the performance of their duties for the interests of the Company in order to achieve the Company’s purposes and objectives. Charter of the Board of Directors As a commitment of the Board of Directors in order to carry out the role and management function of the company as well as to manage the relationship with the Board of Commissioners effectively, therefore the Board Manual was established by virtue of the Decree of the Board of Directors No KEP. DIR692015 dated February 23, 2015 which consists of: 1. General Provisions 2. Capacity to Act 3. Organization and Area of Division 4. General Policy 5. Work Ethics and Working Time 6. Meetings of the Board of Directors 7. Committee 8. Correspondences Such Board Manual contains the explanation of the working relationship between the Board of Directors and the Board of Commissioners in carrying out their duties in order to create a professional, transparent and efficient management of the Company. The establishment of such Board Manual has been complied with corporate law principles, legislation in force, Articles of Association, resolutions of the GMS and GCG principles. Authorities of the Board of Directors As stipulated in the Board Charter, the Board of Directors has two authorities, namely authority to represent and authority to make decision as specified below:

1. Capacity to Represent